23/07/2008 - 22:00

Builders weather WA gas shortage

23/07/2008 - 22:00

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More than a month after the Varanus Island gas explosion forced businesses across WA to curtail their activity, the state's building industry is continuing its operations relatively unscathed.

Builders weather WA gas shortage

More than a month after the Varanus Island gas explosion forced businesses across WA to curtail their activity, the state's building industry is continuing its operations relatively unscathed.

The main impact, according to building companies, has been a disruption to supplies of asphalt, toughened glass and galvanised steel, causing delays on some projects, particularly in the commercial sector.

Reports of brick suppliers running at 60 per cent of capacity has also had an effect, although not across the board, according to Belmont-based Pindan Group.

The company's director of construction, Andy Peppercorn, said that besides a car park waiting to be asphalted, business had been relatively unaffected, although he said disruptions to brick supplies may be felt in coming weeks.

"Probably with the housing sector slowing down, it's not had as big an impact as it would have had a year ago," he said.

"While the commercial side is picking up a bit, the demand from the residential market isn't as strong."

Master Builders Association executive director Michael McLean said of all the building commodities, supplies of asphalt in particular had been affected.

"That's where a number of larger projects are being affected, like the new entrance to the Perth Airport and the Mandurah to Bunbury highway," he said.

"In other areas where the gas disruption has been felt, people have found alternative energy supplies. Businesses are paying exorbitant rates of four to five times [their normal gas rate] for alternative supplies, but it has enabled our industry to continue."

"In the overall scheme of things, our industry is very fortunate, even though we're dealing with higher prices."

In addition to sourcing new energy suppliers, companies have enacted their own contingency plans.

Welshpool-based Boral Asphalt said it had imported a diesel burner from Italy this month, which allowed it to return to full production, albeit with significantly increased costs.

The company said it had suffered delays, a loss in customers and lower sales volumes as a result of the gas shortage. It is still negotiating alternative gas suppliers and gas transportation contracts.

BGC said that while there had originally been concerns over inputs for some areas of manufacturing, including production of windows, there had been no impact.

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